Bunnings has been accused of being “anti-competitive” after it was revealed the hardware giant is trying to take over Mitre10 sites.
Metcash boss chief executive Scott Marshall – the Australian wholesaler that supplies 4000 IGA supermarkets and Foodland stores, as well as hardware outfit Mitre10 – complained about “major chains acquiring” independent stores “to increase their market power to the long-term detriment of consumers”.
He singled out well known players including Coles, Woolworths, alcohol retailer Endeavour which owns the likes of Dan Murphy’s and BWS, and Bunnings for making moves to buy out smaller independent stores in areas where they are seeking greater saturation.
Mr Marshall was participating in the Senate inquiry into the cost of living where he revealed Bunnings’ CEO Mike Schneider had approached at least seven Mitre10 owners this year to ask about acquiring their stores.
“In addition to the acquisitions noted above, there have been instances where Metcash has sought to preclude what it considers to be anti-competitive acquisitions by acquiring an interest in the relevant retailer (in the grocery sector or otherwise), in circumstances where the retailer has been approached by a major retailer,” he told the inquiry at an earlier hearing in March.
“Currently, Metcash is aware of Bunnings writing to at least seven Mitre 10 businesses asking them to consider entering negotiations to sell their store to Bunnings.”
He revealed 22 large-format high turnover grocery and hardware stores had been snapped up by large corporates over the past nine years – making it harder for independents to compete.
Mr Marshall said stronger competition laws would actually help tackle the rising cost of living by forcing retailers to compete on price.
“One area where we believe the federal government can help us is in competition law. We are very concerned about the major chains acquiring our independent stores to increase their market power to the long-term detriment of consumers,” he said.
“In our view, stronger competition laws, particularly focused on stopping increasing market share by store-by-store acquisition, would benefit consumers overall. I think that’s something the government could consider and look at.”
Metcash’s submission to the inquiry also showed the extent independent retailers contributed to the local community, with the IGA network alone employing more than 65,000 people and contributing a whopping $3.1 billion to gross domestic product.
“We know from experience that there’s ample room for larger retailers, smaller retailers and specialty providers alike in the regions and categories we operate in, and think that choice and competition is great for consumers,” he said.
“There have also been instances over the years where local independent hardware store operators have approached us regarding a potential sale of their store. We’ve been pleased that on occasion we’ve been able to provide these independent business owners with a viable succession option.”
Bunnings managing director Mr Schneider told The Australian Financial Review the retailer regularly sought out opportunities to expand its network.
“We know from experience that there’s ample room for larger retailers, smaller retailers and specialty providers alike in the regions and categories we operate in, and think that choice and competition is great for consumers,” he said.
“There have also been instances over the years where local independent hardware store operators have approached us regarding a potential sale of their store. We’ve been pleased that on occasion we’ve been able to provide these independent business owners with a viable succession option.”